Global HR as a Service (HRaaS) Market Size To Grow At 12.5% CAGR From 2023 to 2030

Global HR as a Service (HRaaS) Market Analysis (2023 - 2030)

As per our research report, the  global HR as a service (HRaaS) market size  is estimated to be growing at a CAGR of 12.5% from 2023 to 2030.

Using self-serving cloud-based technologies, HR-as-a-service offers comprehensive end-to-end service solutions for all human resource and payroll demands. In the past, companies heavily relied on paperwork. But with the advancements in technology, all companies are trying to implement this system to ease mankind's life and carry out functions efficiently. With growing research and milestones in AI, ML, and other Data analytics, this market is expected to show tremendous growth generating profits.

One of the significant market drivers is the reduction in costs. Doing this work manually consumes a lot of time and can cause human error. Employing new technology can reduce the company's burden financially. Moreover, this allows the employees in the company to focus on another important task that needs attention. Accuracy and time management are the key factors for the flourishment of this system.

Another major driver is the reduction in risks and the effective management system. Various employee and employer roles are updated constantly. It can be difficult to keep an understanding of all these laws. This technology helps to track all the guidelines, and protocols, and act accordingly. All of the companies’ work and files are evaluated reducing mistakes and thereby benefitting the companies.  

The COVID-19 pandemic had a positive as well as a negative effect on the market. To prevent the spreading of the virus, rules and regulations were implemented globally. This caused people to stay at home and continue their work remotely. This technology became a boon because of its monitoring and assistance. However, the lockdowns came with uncertainty leading to layoffs and financial problems. Startups and a few firms faced budget restrictions to implement the new technology and maintain them.

Despite the various advantages, this service has to offer, there are a few restraints which are faced by this market. Privacy and security of data is one of the biggest concerns. This can create significant losses for the company and the region if any misuse happens. Moreover, understanding of this technology can be an issue causing integral complexities. Furthermore, there might not be open communication between employees leading to miscommunication.

Extensive R&D is being carried out in cloud computing, artificial intelligence, machine learning, and other data insights to broaden human understanding. Companies are ready to invest heavily and this is helping the market. Moreover, there are various educational programs through meets, webinars, and blogs to help people understand the use and maintenance and to upskill themselves.

KEY MARKET INSIGHTS: 

• Based on deployment mode, the cloud-based model is the largest and fastest-growing segment in the HR as a service market. This is because of advantages like cost effectiveness, easy access, flexibility, automatic updates, user-friendly features, reduced IT burden, and positive user experience.
• Based on organization size, large enterprises are the largest growing segment in the market.  This is because they have a higher number of employees, are equipped with better investments, and need complex operations. Small and Medium-sized enterprises are the fastest growing. This is due to Government initiatives to fund startups, increasing number of investors, awareness about the advantages of technology, and rising income. 
• Based on service type, core HR is the largest growing segment in this market. Certain tasks like payment, employee data management, monitoring and evaluation of performance, and other reporting services require attention contributing to the success of the segment. Talent management is the fastest growing. Tasks like recruiting new employees, tracking login details, allotting holidays, sick leaves, and other benefits are carried out by this service.
• Based on end-users, the IT and Telecom sector is the largest growing segment in this market. There are a lot of youngsters who are interested in pursuing a career in the IT field mainly due to the comfortable lifestyle that comes with the associated incomes. Therefore, handling so many people becomes tiring and thereby these services are employed to monitor, help, and evaluate the needs of the company as well as employees. However, healthcare is the fastest growing due to the increasing number of people, remote work norms, data security, and the need for regulatory compliance.
• Based on region, North America is the largest growing in this market. Countries like the United States and Canada have developed economies, educated people, infrastructure, money, and key companies. However, factors like urbanization, industrialization, rising middle class, technological improvements, and increasing funds are making the Asia Pacific the fastest growing with countries like China and India at the top.

MARKET SEGMENTATION:

By Deployment Model:

• Cloud-Based
• On-Premises

By Organization Size:

• Small and Medium-sized Enterprises
• Large Enterprises

By Service Type:

• Core HR
• Talent Management
• Employee Engagement
• Workforce Planning and Analytics
• Others

By End-User:

• IT and Telecom
• Healthcare
• BFSI
• Retail
• Manufacturing
• Others

By Region

• North America
• Europe
• Asia-Pacific
• South America
• Middle East & Africa

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